Trust and Relationships in Negotiations

How do relationships affect negotiation dynamics?

Negotiation is fundamentally a communication exercise between individuals. In many negotiations, the other person is the focal problem. The nature of the negotiator’s interaction and the relationship that ensues has a major impact on the negotiation process. Negotiation is often not a way to discuss an issue, but a way to learn more about the other party and increase interdependence. In some negotiations, relationship preservation is the negotiation goal, and parties may make concessions on substantive issues to preserve or enhance the relationship. As an example of the effect of relationship on negotiations, research indicates that communal-sharing relationships lead to greater empathy and cooperation in negotiations; better performance in decision-making and performance-coordination tasks; increased attention to the other party’s outcomes; reluctance to use coercive tactics; likelihood to share information; and greater likelihood of compromise and problem-solving approaches to negotiations. Negotiating within relationships may never end. Parties may defer negotiations over tough issues in order to start on the right foot. Issues on which parties truly disagree may never go away. Attempting to anticipate the future and negotiate everything up front is often impossible.

There are three common types of relationship in negotiation include: business-only, friendship-only, and multiplex relationships that involve both.

• Business-Only Negotiations – Negotiation in business-only relationships are unique in that expectations for the relationship are limited and easily defined. A common practice in business negotiations is “market pricing “. This is a method of putting value on things in which everything is reduced to a single value or utility metric that allows for the comparison of many qualitatively and quantitatively diverse factors. Market pricing is difficult in a blended or friend-only relationship. A notable difficulty in a business negotiation is the requirement to quickly establish trust in a situation where there is little knowledge or previous interactions. Further, business relationships often have status and rank issues associated with them.

• Friend-Only Negotiations – Friend-only negotiations are plagued by numerous attributes that make them more difficult. Generally, people are uncomfortable negotiating with friends. Part of this discomfort is due to cultural and exchange norms. Cultural norms drive use to take care of the people we love and are close to, respond to their needs, and not “keep track” of who has provided what in the relationship. “Exchange norms” concern the giving and taking of benefits and resources. The result is that friends are often less competitive with each other. The problem is that friendship may also block individuals from achieving high-level integrative agreements. Friends have a tendency to gravitate toward equality rules or equity rules in resolving a conflict. A phenomenon known as the “abilene paradox” is when friendship leads to the mismanagement of agreement.

• Mixed Negotiations – A relationship between parties that is both personal (e.g., friends or family) and business related is commonly known as an “embedded relationships.” Relationships that emanate from ingrained habits of past social interactions are known as “sticky ties”. There is much higher potential for emotions, internal value conflict, and a lack of creativity or innovation.

What contributes to the presence of trust in a negotiation relationship?

There are three factors that contribute to the level of trust one negotiator may have for another:

• Disposition – the individual’s chronic disposition toward trust;

• Context – the situational factors (context surrounding or giving rise to the dispute or conflict); and

• Relationship – the history or prior relationship between the parties.

Likewise, there are 3 types of trust present in any relationship.

• Deterrence-based trust – This is a type of trust that sustains behavioral consistency through threats or promises of consequences that will result if consistency is not maintained. This usually results from the development and maintenance of systems. Deference-based trust relates closely to concepts of justice and fairness. Justice can take several forms. “Distributive justice” is about the distribution of outcomes. “Procedural justice” is about the process of determining outcomes. “Interactional justice” is about how parties treat each other in one-to-one relationships. “Systemic justice” is about how organizations appear to treat groups of individuals and the norms that develop for how they should be treated. Deference-based trust depends upon repercussions if a fair or just process is not followed or result is not reached. A concept related to deterrence-based trust is “reactance” (or backfiring effect). This is a psychological principle stating that people often have a negative reaction when they perceive that their freedom is being limited or their behavior is being controlled; hence, they will engage in the opposite of the behaviors that surveillance is either attempting to ensure or control.

• Knowledge-based trust – A type of trust grounded in behavioral predictability, occurring when a person has enough information about others to understand them and accurately predict their behavior. As such a person’s reputation has an effect on trust in a relationship. Reputation is a “perceptual identity, reflective of the combination of salient personal characteristics and accomplishments, demonstrated behavior and intended images preserved over time, as observed directly and/or as reported from secondary sources”. Reputation tends to be perceptual and highly subjective in nature. An individual can have a number of different, even conflicting, reputations because she may act quite differently in different situations. Reputations are shaped by past behavior and influenced by an individual’s personal characteristics and accomplishments. Reputations develop over time; once developed, they are hard to change. Early experiences with another shape our views, which we bring to new situations in the form of expectations. These expectations are then confirmed or disconfirmed by the next set of experiences. One’s reputation can shape the emotional states and expectations of others.

• Identification-based trust – A type of trust that develops based on empathy for another person’s desires, values, and intentions. This is closely related to knowledge-based trust, but it entails a level of personalization of interests. It often derives from a perceived commonality of goals.

What are rational and deliberate mechanisms for building trust in a negotiation?

Two primary approaches exist for establishing trust in a negotiation:

• Cognitive route – Building trust based on rational and deliberate thoughts and considerations. In summary, this approach depends on logic. A negotiator relates the objectives or interests of the other party to an organized approach to maximizing that value given the context of the negotiation.

Numerous psychological tendencies influence the creation of trust through either of the aforementioned approaches. Three notable examples include:

• Similarity-attraction effect – The tendency for people who are similar to each other to like and be attracted to one another. This can create an emotional bond that affects the negotiation. Further, an individual may recognize a tendency toward association with like individuals. In such a case, this may lead to a conscience and calculated preference for negotiating or reaching agreement with similar individuals.

• Exposure – Simply being in contact with individuals in a manner that has an impact upon them. For example, propinquity effect is the strong tendency for people to like, and become friends with, people that are physically and/or geographically closer to them. Likewise, functional distance is the effort involved in crossing a physical distance and how it corresponds to communication (e.g., two offices separated by 10 feet of space are easier to make contact between than are two offices separated by a one-foot-thick, solid brick wall). These tendencies may affect how we observe and process information from the other party. It can also heighten or reduce the effect of negotiation on the negotiator.

• Reciprocity – A situation in which we feel obligated to return in kind what others have offered or given to us.

Below are some common tactics that fit within the aforementioned approaches for building trust in a negotiation:

• Commonality – Numerous tactics seek to leverage the psychological tendency toward commonality. Negotiators may be more likely to reach agreement if they can develop a common goal or shared vision for the resolution of the conflict or dispute. Mimicry or mirroring is when one negotiator seeks to emulate the actions, beliefs, or understanding of the other party. Another approach is to find a shared problem or a shared enemy. Similarly, schmoozing/flattery seeks to leverage the internal desire to be understood and accepted. The result is a level of actual or perceived commonality that can influence the negotiation. Lastly, self-disclosure is a tactics that seeks to make one’s position understood. Opening up in this manner demonstrates a level of vulnerability that can create an emotional reaction.

• Networking – Third parties can have a strong effect on our perception of events or situations. When seeking to establish or strengthen the trust in a relationship, seek to capitalize on the network connections common to the negotiators. A social network can reaffirm or influence individual beliefs, including confidence and trust.

• Plan for Future – Plan the negotiation to focus on the future (continued relationship or transactions) between the parties.

What are some actions or tendencies that lead to mistrust and how can loss of trust be repaired?

Any number of actions or tendencies by parties may run counter to the beliefs expectations or understanding of the other party. As such, to avoid a loss of trust, the following activities should be avoided in a negotiation:

• Breaches or defections – The act of maximizing one’s own interests at the expense of another person or group. Normally, this entails acting contrary to the expectations of another party in a manner that causes the other party a loss of value.

• Miscommunication – This is a failure to communicate information is a manner readily understood by the other party. Miscommunication can result from a deficiency on the party of the transmitter or the receiver.

• Dispositional attributions – An attribution that calls into question another person’s character and intentions by citing them as the cause of a behavior or incident. For example, “halo effect” is the assumption that if people possess one socially desirable characteristic, then they also must possess other attractive traits. “Forked-tail effect” is a tendency to see people as having other undesirable characteristics in completely unrelated domains once we have identified one negative trait.

Individuals can use any number of approaches to address breaches of trust. Efforts to repair broken trust begin with determining the existence and extent of broken trust. The following is a proposed approach to remedying broken trust.

• Verbal Account – Arrange a personal meeting to discuss the conflict and any surrounding issues.

• Relationship – During a discussion, focus on the underlying relationship and identify points of contention.

• Apologize – Taking responsibility for all or some aspects of underlying relationship tension is important to disarm conflict.

• Air Grievances – Let the other party vent or express their discontent with your conduct or beliefs. Try to avoid getting defensive.

• Clarification – At this point you can test your understanding and ask for clarifying information.

• Formulate a Remedy – The parties can then begin to put together a plan to address inequities or concerns about the relationship. This may include reparations, which is a payment or transfer of value representing the perceived prior inequity or losses by the other party. This most commonly includes “structural solutions” such as creating rules, regulations, and procedures to minimize the likelihood of violation in the future.